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Employee Privacy and the "Theory of the Firm”

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  • MATTHEW W. FINKIN

Abstract

Bruce Kobayashi and Larry Ribstein apply the "theory of the firm” to worker privacy with specific application to the employer’s ability to monitor employee performance and behavior. They take the theory to drive toward a much reduced role for law in favor of regulation by contract. This essay unpacks their theory. It faults the theory for its failure to come to grips with the possibility of monopsony in the labor market, its failure to appreciate the "public goods” nature of privacy policies and the related assumption that the employer’s ability to adopt and apply privacy-invasive policies is invariably a product of a consensual arms-length bargain.

Suggested Citation

  • Matthew W. Finkin, 2005. "Employee Privacy and the "Theory of the Firm”," Journal of Labor Research, Transaction Publishers, vol. 26(4), pages 711-723, November.
  • Handle: RePEc:tra:jlabre:v:26:y:2005:i:4:p:711-723
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    References listed on IDEAS

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    1. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    2. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
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    4. David Neumark & William Wascher, 1995. "The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Re-Evaluation Using Payroll Records," NBER Working Papers 5224, National Bureau of Economic Research, Inc.
    5. repec:fth:prinin:298 is not listed on IDEAS
    6. Lawrence Katz & Alan Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Working Papers 678, Princeton University, Department of Economics, Industrial Relations Section..
    7. Orley Ashenfelter & David Card, 1982. "Time Series Representations of Economic Variables and Alternative Models of the Labour Market," Review of Economic Studies, Oxford University Press, vol. 49(5), pages 761-782.
    8. Frey, Bruno S, et al, 1984. "Consensus and Dissension among Economists: An Empirical Inquiry," American Economic Review, American Economic Association, vol. 74(5), pages 986-994, December.
    9. Jean Baldwin Grossman, 1983. "The Impact of the Minimum Wage on Other Wages," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 359-378.
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